Health insurers are hitting primary care spending targets

ACCORDING TO A REPORT from the office of Christopher F. Koller, R.I. Health Insurance Commissioner, Rhode Island's health insurers met their spending targets for primary care in 2011 and are expected to do the same in 2012.

PROVIDENCE – A new report issued today by the R.I. Office of the Health Insurance Commissioner found that commercial health insurers met the spending targets for primary care in 2011 and are expected to do so for 2012.

Primary care spending is the first of four affordability standards introduced in 2010 by OHIC that requires commercial health insurers in Rhode Island – Blue Cross & Blue Shield of Rhode Island, UnitedHealthcare of New England and Tufts Health Plan – to prioritize paying for affordable, high-quality health care.

Under the primary care standard, health insurers are required to increase primary care’s share of total medical spending by one percentage point a year between 2010 and 2014.

All three companies are meeting their targets, according to R.I. Health Commissioner Christopher F. Koller.

Blue Cross grew from 7.2 percent in 2010 to 8.2 percent in 2011, and projects 9.0 percent in 2012.

UnitedHealthcare spent 6.5 percent of its dollars on primary care in 2010, 7.5 percent in 2011 and projects 8.5 percent in 2012.

Tufts, a new market entrant and without sufficient volume to establish a realistic target for the first year, has increased its primary care share from 6.9 percent in 2009 to a projection of 9.5 percent – the highest of the three companies – in 2012.

In total, primary care spending grew from $48 million in 2007 to $59 million in 2011, with $66 million projected for 2012, according to the report.

The increases in primary care spending contrast with the fall in total medical spending among privately insured members, which fell from $886 million in 2007 to $730 million in 2011, the report found. Medical spending is projected to increase in 2012 to $742 million.

According to the report, the overall decline in medical spending has several root causes:

The dampening effect of the recession and slow economic recovery on spending;

The popularity among employers and members of leaner, cheaper benefit packages that shift more costs to the member; and,

The shift to self-insurance.

Moving forward, the report asks: “The question we must answer is not whether we should emphasize non-fee-for-service investments, but rather which non-FFS investment should receive priority support to maximize the potential before us to build a system centered on affordable and coordinated care.”

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